ABS Monthly Report (2025 - 04)

ABS Monthly Report (2025 - 04)

Review of the Current Period

Output was 0.522 million tons this period, down 8.1% from the preceding period, with the operating rate dropping by 6.95% and the capacity utilization rate standing at 66.05%. In March 2025, imports reached 0.0747 million tons, a 7% increase from the prior period. However, total imports from January to March dipped by 8.3% year - on - year. Exports in March stood at 0.0264 million tons, a 36.8% surge from the previous period, while cumulative exports from January to March climbed 60.5% compared to the same period last year. As of the end of April, the finished goods inventory was 0.196 million tons, a 0.51% decline from the preceding period.

Regarding prices, ABS material prices dropped by 300 - 500 yuan / ton this period. The main raw material, butadiene, saw a price reduction of 1600 - 1700 yuan / ton, with styrene and acrylonitrile also experiencing declines. A slight cost reduction is anticipated for May, with styrene expected to show weak fluctuations and acrylonitrile likely to fluctuate around 7500 - 8000 yuan / ton, while butadiene is on a downward trajectory.

On the demand front, ABS material demand has been sluggish this period. Domestic demand in April was average, and imports are expected to remain relatively stable. For May, downstream export demand is projected to be difficult to reverse, with terminal enterprises facing inventory backlogs and limited actual growth. Although white goods production schedules for May are higher than the same period last year, terminal demand is primarily just rigid demand, and the supply - exceeding - demand situation is challenging to improve.

Cost

The primary raw materials for ABS are butadiene, styrene, and acrylonitrile. In April, the butadiene market price in East China was 0.895 million yuan / ton, the styrene market price in Zhejiang was 0.7235 million yuan / ton, and acrylonitrile was priced at 0.84 million yuan / ton. For May, spot styrene in Jiangsu is expected to range between 0.7 - 0.74 million yuan / ton, acrylonitrile is likely to fluctuate near 0.75 - 0.8 million yuan / ton, and butadiene is anticipated to be around 0.8 - 0.9 million yuan / ton. Sequentially, butadiene prices fell by 19%, styrene by 10.1%, and acrylonitrile by 8.7%.

The main reasons for the price changes are as follows: During and after the Qingming Festival, the escalation of the US - China trade war led to a decline in crude oil and raw material prices. Macro - impacts caused butadiene prices to drop by 1600 - 1700 yuan / ton, and weak pure benzene prices drove down styrene prices. In April, the new Yulong facility commenced operations, resulting in a market supply exceeding demand. It is anticipated that ABS costs will decrease in the upcoming period due to an increase in styrene supply and a reduction in demand in May, with acrylonitrile and butadiene operating weakly.

Supply

The capacity utilization rate dropped to 66.05% this period from 73% in the previous period, a sequential decline of 6.95%. In April, the start - up rate of China's ABS industry remained the same as the capacity utilization rate, decreasing by 6.95% compared to March. This indicates a reduction in the industry's production activity and may suggest changes in market demand or the production chain. In April, domestic ABS production fell by 8.1% sequentially from March. The total output from January to April 2025 was 2.163 million tons, an increase of 32.98% compared to the same period last year (an additional 0.5365 million tons). This period's capacity stood at 0.522 million tons, a decrease of 0.046 million tons or 8.1% from March. Manufacturers are expected to slightly increase production in May, with industry output likely to rise sequentially. However, Liaoning Jinfa's facility will be under maintenance from May 15 to June 30, and Haijiang and Jinfa have scheduled maintenance for their acrylonitrile plants in May, which may affect ABS production. The main reason for the decline in this period's start - up rate is the oversupply in the market.

These data hold great significance for purchasing and sales personnel. Procurement staff can assess raw material supply and price trends in advance to plan strategies. Sales personnel can adjust sales programs in line with market demand to cope with fluctuations.

Demand

The reasons for the changes in demand are as follows: On the one hand, the macro - economic bias and tariffs have a significant impact. After May, the export market for home appliances shrinks, and domestic demand is insufficient. During and after the Qingming Festival, the escalation of the US - China trade war drove down crude oil and raw material prices. In April, Yulong's new unit went into operation with a low bidding price, leading to an oversupply in the market and a price drop of 300 - 500 yuan / ton. On the other hand, macro - factors caused butadiene prices to fall by 1600 - 1700 yuan / ton, and weak pure benzene prices drove down styrene prices. In May, although some manufacturers' facilities are under maintenance, Yulong and Zhejiang Petrochemical plants will enhance their start - up rates, resulting in an overall supply still exceeding demand, with insufficient customer willingness to stock up.

However, demand is expected to rise in the next period. White goods production in May is higher than the same period last year, but terminal enterprises are facing inventory backlogs and increased financial pressure. Domestic demand in April is average with little change. In May's white goods production, refrigerator production fell by 4.9% compared to the same period last year, while air conditioners and washing machines show growth. Affected by US tariff policies, downstream export demand is expected to be difficult to reverse, with limited actual growth. Market demand this period is sluggish, with weak domestic transactions in April and difficult - to - change downstream export demand in May, resulting in terminal inventory backlogs.

Forecast

Manufacturers' output is forecast to reach 0.54 million tons in May, indicating a rise. However, the start - up rate is declining, and the capacity utilization rate may drop to 63%. This will significantly impact chemical industry procurement and sales. If production increases but demand growth lags behind supply, product prices may decrease. With the reduction in start - up rates and capacity utilization rates, some companies may encounter production obstacles. Procurement staff should monitor production levels and plan purchase volumes rationally to prevent inventory backlogs. Sales personnel need to layout market strategies in advance to address price fluctuations and intensified competition.

Meanwhile, raw material prices are expected to decline. Spot styrene prices in Jiangsu are projected to range between 7,000 - 7,400 yuan / ton. Acrylonitrile market prices may fluctuate around 7,500 - 8,000 yuan / ton and butadiene mainstream prices are likely to be around 8,000 - 9,000 yuan / ton. Due to the escalation of the US - China trade war, falling raw material prices, and new facilities coming on - line leading to oversupply, raw material costs in May are anticipated to decrease slightly. Demand will still exceed supply, and prices, which fell by 300 - 500 yuan / ton in April, are expected to remain weak after the holiday. With low market demand forecasted, May's white goods production, although higher than the same period last year, will still be affected by US tariff policies. Downstream export demand is expected to be difficult to reverse, and the overall supply - exceeding - demand situation will persist. The market outlook is bearish. It is recommended to closely monitor manufacturers' pre - sales, raw material price trends, and petrochemical plant offers, and maintain a wait - and - see approach.